Today the federal government released its unemployment report for February 2010. The official unemployment rate held steady at 9.7%. Some economists welcomed this as a sign of a stabilizing economy. Perhaps someone should tell these economists that the official unemployment rate is misleading. It is a sign of horse crap. Why?
The official unemployment rate LEAVES OUT those folks that are discouraged and have ceased looking for work. It also leaves out those that are “under-employed”; those that no longer have full-time jobs but have settled for part-time work. In other words, the official unemployment rate…
leaves out…A LOT OF UNEMPLOYED PEOPLE!
The moment an unemployed person drops out of the job search process because they are discouraged and have ceased looking, they are no longer officially counted as unemployed. They end up in a more obscure (but more accurate) statistic referred to as the “U-6” unemployment rate. In the same report, this down-played rate is over 16%!
Some of you may remember an essay I did a few years ago where I criticized the “core rate of inflation” which was an official government statistic which tracked inflation but totally left out “food and energy” from its calculation. Some humorously jabbed the core rate of inflation and described it as “the rate of inflation…excluding inflation”.
The statistical wizards at the federal government have done to unemployment reporting what they did to inflation reporting. It is time for some observers to call the official unemployment what it should be called: “the core rate of unemployment”. That way the satiric observers among us can describe the official unemployment rate as “the rate of unemployment excluding unemployment”.
Personal strategy: Unemployed or not, I think that everyone should their God-given talents and abilities to start their own business. It could be home-based and done in your spare time. Don’t just diversify your investment portfolio, diversify your time and effort with active strategies for earning money. Take a look at the audio seminar Home Business Goldmine which you can download instantly at www.SuperMoneyLinks.com.
If you have lost your job or you worry about your current job, you have the ability to generate income. A part-time home business is a great way to start. I am in the process of creating both free and low-cost resources to help folks earn money so feel free to stay informed with my developments at www.twitter.com/paulmlad.
Friday, March 5, 2010
Friday, February 19, 2010
A Trillion Dollar Reason to be Self-Sufficient
The Pew Center for the States recently issued a report that the states are cumulatively short on their promised pension benefits to current and retired workers by $1 TRILLION. This report uses data from mid-2008 so it doesn't include the fact that pension assets got hammered during late 2008 and into early 2009. This means that the financial situation is more dire than the report indicates.
If you think you are safe because you are not dependent on a state pension. Think again. Many corporate pension plans are suffering a shortfall. In addition, Social Security's shortfall is much, much greater. Millions of current and future retirees are at risk to the tune of TRILLIONS. The growing anger toward politicians is very real and very justified.
IF YOU ARE FINANCIALLY DEPENDENT ON ANYONE, YOU ARE AT RISK.
TAKE STEPS NOW TO BECOME MORE SELF-SUFFICIENT.
No matter what the speech-makers out of Washington, Wall St. and the state capitals tell you, the situation is extraordinarily serious and a humongous shortfall looms for millions in our society. There will be massive problems with virtually everyone's retirement future unless they take steps to avoid the inevitable financial pain.
I will be completing some educational programs soon to help people prepare themselves financially during the coming months and years. If you want to be alerted, feel free to follow me at www.twitter.com/paulmlad.
Let me clue you in to what you should be thinking about in general terms. At the very least, you should be developing a two-pronged approach in your financial strategies; Passive and Active.
Passive means that you should have your assets work in your favor and not against it. In prior essays (and in future) I cover the idea that the foundation of your financial assets (stocks, ETFs, etc.) should be in investments tied to "Human need". I cover this in greater detail in my financial seminar described at www.ProsperityNetwork.net.
Active means that you are using your time, effort, abilities and initiative in creating wealth such as reducing your debt or increasing your income. I think that EVERYONE should consider having a business (part-time or otherwise) as part of your over-all wealth-building strategies. Some of you already know that I have taught home business start-up seminars for over two decades. Don't forget that you are your own greatest asset.
You can find out details at www.SuperMoneyLinks.com. I do plan on providing some how-to education on topics such as starting a business and protecting your retirement assets in the near future. Keep checking back here for details and updates.
I wish all of you continued success and prosperity...we'll get through this but not without knowledge and preparation. Feel free to email me with your questions at paul@mladjenovic.com. If I can provide a resource to help you, I would be glad to.
Regards,
Paul Mladjenovic
www.ProsperityNetwork.net
If you think you are safe because you are not dependent on a state pension. Think again. Many corporate pension plans are suffering a shortfall. In addition, Social Security's shortfall is much, much greater. Millions of current and future retirees are at risk to the tune of TRILLIONS. The growing anger toward politicians is very real and very justified.
IF YOU ARE FINANCIALLY DEPENDENT ON ANYONE, YOU ARE AT RISK.
TAKE STEPS NOW TO BECOME MORE SELF-SUFFICIENT.
No matter what the speech-makers out of Washington, Wall St. and the state capitals tell you, the situation is extraordinarily serious and a humongous shortfall looms for millions in our society. There will be massive problems with virtually everyone's retirement future unless they take steps to avoid the inevitable financial pain.
I will be completing some educational programs soon to help people prepare themselves financially during the coming months and years. If you want to be alerted, feel free to follow me at www.twitter.com/paulmlad.
Let me clue you in to what you should be thinking about in general terms. At the very least, you should be developing a two-pronged approach in your financial strategies; Passive and Active.
Passive means that you should have your assets work in your favor and not against it. In prior essays (and in future) I cover the idea that the foundation of your financial assets (stocks, ETFs, etc.) should be in investments tied to "Human need". I cover this in greater detail in my financial seminar described at www.ProsperityNetwork.net.
Active means that you are using your time, effort, abilities and initiative in creating wealth such as reducing your debt or increasing your income. I think that EVERYONE should consider having a business (part-time or otherwise) as part of your over-all wealth-building strategies. Some of you already know that I have taught home business start-up seminars for over two decades. Don't forget that you are your own greatest asset.
You can find out details at www.SuperMoneyLinks.com. I do plan on providing some how-to education on topics such as starting a business and protecting your retirement assets in the near future. Keep checking back here for details and updates.
I wish all of you continued success and prosperity...we'll get through this but not without knowledge and preparation. Feel free to email me with your questions at paul@mladjenovic.com. If I can provide a resource to help you, I would be glad to.
Regards,
Paul Mladjenovic
www.ProsperityNetwork.net
Wednesday, January 27, 2010
Who is right…Paul Krugman or Ringo Starr?
Copyright 2010. Paul Mladjenovic. All rights reserved.
January 27, 2010
Ponder for a moment the following quotes:
“Everything government touches turns to crap”
Ringo Starr
“We need more government”
attributed to Paul Krugman (see below)
The first quote by Ringo Starr is an actual quote and you can easily find it on many quote sites on the internet.
The second quote is attributed by…me! You probably won’t find that quote (and maybe you will). You might even find that Paul Krugman may deny saying it but probably embracing the point. I attribute it to him as an “unofficial summary” of his writings over the years.
Why? Because if you are an avid Krugman reader (which I am) you will no doubt come to the same conclusion. In ways both overt and subtle, one of the biggest messages (maybe the biggest) from him is that he wants bigger government. He wants more spending and more debt because he sincerely believes that more government is better for the world. When someone points out how a government program is failing (such as medicare) he basic retort is that we can solve it with…more government. Yikes!
Look…I am sure that he is a nice guy and that he means well. I am sure that he knows something about economics although I am still scratching my head over why he got the Nobel Prize (I can name a dozen that I think deserve it). But, with all due respect, I wish that he knew more about economics! At the very least, I wish he had Ringo Starr’s insights. Why?
Think about the following points that you will find in Krugman’s latest writings…
“…a spending freeze is wrong…”
“…the federal government needs to spend more…”
Right now the government is spending trillions that our society can not possibly afford. Whatever government spends, we must pay for. Either we pay for it now (current taxes) or we pay for it later (future taxes). If we don’t have the money, then the government goes into greater debt. We will either pay for this massive debt in obvious ways (such as taxes) or in less obvious ways (such as inflation). No matter how you slice it, we will pay and it will be a very, very painful price. This is the lesson of history.
He has said in some columns that government spending helps to kick-start economic growth and job creation. This is both economically wrong and logically wrong. The year 2009 should be a clear lesson in this. During 2009, government spending went through the roof…yet…the unemployment rate went up drastically. He should understand that the ONLY way that government can “create a job” (such as a government job) is if it first takes resources that DESTROY private sector job(s).
When private sector jobs are eliminated, you shrink the pool of people that PAY taxes. Then…when you hire people for government jobs, you have to pay for them with taxes! In other words, you expand the burden on the private economy which in turn means less tax revenue which means sky-rocketing deficits (and more debt).
We must understand that our economy is like a “pack mule” and the government is “the cargo”. If the mule is on wobbly legs, you won’t help it move faster by adding more cargo. Why is this so hard to understand?
I can only hope that a rock star can help an economist figure this out.
----------------------------------
Paul Mladjenovic, CFP is the author of Stock Investing for Dummies and Precious Metals Investing for Dummies. He is a national seminar leader and his current downloadable seminars are at www.ProsperityNetwork.net and www.SuperMoneyLinks.com.
January 27, 2010
Ponder for a moment the following quotes:
“Everything government touches turns to crap”
Ringo Starr
“We need more government”
attributed to Paul Krugman (see below)
The first quote by Ringo Starr is an actual quote and you can easily find it on many quote sites on the internet.
The second quote is attributed by…me! You probably won’t find that quote (and maybe you will). You might even find that Paul Krugman may deny saying it but probably embracing the point. I attribute it to him as an “unofficial summary” of his writings over the years.
Why? Because if you are an avid Krugman reader (which I am) you will no doubt come to the same conclusion. In ways both overt and subtle, one of the biggest messages (maybe the biggest) from him is that he wants bigger government. He wants more spending and more debt because he sincerely believes that more government is better for the world. When someone points out how a government program is failing (such as medicare) he basic retort is that we can solve it with…more government. Yikes!
Look…I am sure that he is a nice guy and that he means well. I am sure that he knows something about economics although I am still scratching my head over why he got the Nobel Prize (I can name a dozen that I think deserve it). But, with all due respect, I wish that he knew more about economics! At the very least, I wish he had Ringo Starr’s insights. Why?
Think about the following points that you will find in Krugman’s latest writings…
“…a spending freeze is wrong…”
“…the federal government needs to spend more…”
Right now the government is spending trillions that our society can not possibly afford. Whatever government spends, we must pay for. Either we pay for it now (current taxes) or we pay for it later (future taxes). If we don’t have the money, then the government goes into greater debt. We will either pay for this massive debt in obvious ways (such as taxes) or in less obvious ways (such as inflation). No matter how you slice it, we will pay and it will be a very, very painful price. This is the lesson of history.
He has said in some columns that government spending helps to kick-start economic growth and job creation. This is both economically wrong and logically wrong. The year 2009 should be a clear lesson in this. During 2009, government spending went through the roof…yet…the unemployment rate went up drastically. He should understand that the ONLY way that government can “create a job” (such as a government job) is if it first takes resources that DESTROY private sector job(s).
When private sector jobs are eliminated, you shrink the pool of people that PAY taxes. Then…when you hire people for government jobs, you have to pay for them with taxes! In other words, you expand the burden on the private economy which in turn means less tax revenue which means sky-rocketing deficits (and more debt).
We must understand that our economy is like a “pack mule” and the government is “the cargo”. If the mule is on wobbly legs, you won’t help it move faster by adding more cargo. Why is this so hard to understand?
I can only hope that a rock star can help an economist figure this out.
----------------------------------
Paul Mladjenovic, CFP is the author of Stock Investing for Dummies and Precious Metals Investing for Dummies. He is a national seminar leader and his current downloadable seminars are at www.ProsperityNetwork.net and www.SuperMoneyLinks.com.
Friday, January 22, 2010
3 Things Everyone Needs to Do with Money in 2010
By Paul Mladjenovic. January 22, 2010.
Copyright 2010. Paul Mladjenovic. All rights reserved.
Yes…2008-09 was a bruising time period. Many securities plunged and many accounts were massacred. Although we got through it, there is an uneasy feeling that more trouble is yet to come.
I expect that more catastrophes are heading our way since the fundamentals for our economy are still very weak and Washington is still working on policies that will do more harm than good. In the past twelve months, our expanding federal government has added trillions more in debt to our already massive debt burden.
OUR GOVERNMENT CAN NOT SPEND OUR COUNTRY INTO
TRLLIONS OF DOLLARS OF DEBT WITHOUT CONSEQUENCE.
I am working on my next set of forecasts and seminars but before they are out, I want everyone (and I mean EVERYONE) to consider 3 simple things to gain greater financial peace of mind:
• Diversify away from paper assets. As I have written before, paper assets have “counter-party risk”. Any “paper” investment that you have (such as stocks, bonds, ETFs, mutual funds, cash accounts, etc.) have counter-party risk. In other words, that investment’s value is tied to someone else’s promise or performance. A stock can go worthless if that company ceases to perform well (or just ceases to perform!). Bonds can become worthless if the borrower can’t or won’t pay. What should you consider? Add some gold or silver physical bullion to your asset portfolio. Gold and silver bullion are among the very few investments that do not have counter-party risk. They have their own, unique intrinsic value and that has been true for thousands of years. It will continue to be true for years to come.
• Accumulate essentials. As odd as this may sound for some of you, consider starting a pantry or otherwise consider stocking up on essentials such as non-perishable foods, extra water, etc. No…I am not asking you to become a survivalist or a hermit. I consider this is to be just another form of diversification. The world is too precarious right now and is quite vulnerable to disruptions. Severe inflation is not far off. Potential problems can come from a variety of expected and unexpected venues. What do you think will have greater value a few years from now…a dollar or a can of soup?
• Re-focus your portfolio with emphasis on “human need”. You should consider stocks and ETFs of companies and industries that provide goods and services that are actually NEEDED. Think about what people will continue to buy no matter how good or bad the economy is. I think that part of your long-term picture should include commodities.
Trillion-dollar tinkering will continue in Washington. Ongoing massive blunders and financial difficulties will need to be faced by all of us. Take steps now. You will be glad you did.
If you want to be alerted to the next financial educational programs and essays, feel free to follow me at www.twitter.com/paulmlad.
We have to be mindful of the fact that much of today’s difficulties (and tomorrow’s) is not due to some “Democrat” or “Republican” or strictly to something that is “left-wing” or “right-wing”. It is primarily due to Statism. “Statism” is the idea and practice that government should kept growing and becoming more and more involved in our private lives, businesses and finances. Unfortunately, most politicians across the political landscapes tend to be statists (at varying degrees). For the public, this is a fatal attraction since the unintended consequence is that it breeds greater dependence for more and more of our citizenry.
The problem with dependence means setting yourself up for vulnerability. Don’t let it happen! Today, there are millions of adults in our country that are dependent on others (such as government). What happens when government fails? Would you want to depend on a government bureaucracy such as the state of California or on a corporation such as General Motors (which is also dependent on government)? What other government agencies and corporations are at risk? What will happen when the federal government itself starts having financial problems? How about Social Security?
The more you strive for independence and self-sufficiency, the safer you will be.
----------------------------
Paul Mladjenovic, CFP is the author of Stock Investing for Dummies and the audio “HOW TO CASH IN ON THE COMMODITIES SUPER BOOM”.
Copyright 2010. Paul Mladjenovic. All rights reserved.
Yes…2008-09 was a bruising time period. Many securities plunged and many accounts were massacred. Although we got through it, there is an uneasy feeling that more trouble is yet to come.
I expect that more catastrophes are heading our way since the fundamentals for our economy are still very weak and Washington is still working on policies that will do more harm than good. In the past twelve months, our expanding federal government has added trillions more in debt to our already massive debt burden.
OUR GOVERNMENT CAN NOT SPEND OUR COUNTRY INTO
TRLLIONS OF DOLLARS OF DEBT WITHOUT CONSEQUENCE.
I am working on my next set of forecasts and seminars but before they are out, I want everyone (and I mean EVERYONE) to consider 3 simple things to gain greater financial peace of mind:
• Diversify away from paper assets. As I have written before, paper assets have “counter-party risk”. Any “paper” investment that you have (such as stocks, bonds, ETFs, mutual funds, cash accounts, etc.) have counter-party risk. In other words, that investment’s value is tied to someone else’s promise or performance. A stock can go worthless if that company ceases to perform well (or just ceases to perform!). Bonds can become worthless if the borrower can’t or won’t pay. What should you consider? Add some gold or silver physical bullion to your asset portfolio. Gold and silver bullion are among the very few investments that do not have counter-party risk. They have their own, unique intrinsic value and that has been true for thousands of years. It will continue to be true for years to come.
• Accumulate essentials. As odd as this may sound for some of you, consider starting a pantry or otherwise consider stocking up on essentials such as non-perishable foods, extra water, etc. No…I am not asking you to become a survivalist or a hermit. I consider this is to be just another form of diversification. The world is too precarious right now and is quite vulnerable to disruptions. Severe inflation is not far off. Potential problems can come from a variety of expected and unexpected venues. What do you think will have greater value a few years from now…a dollar or a can of soup?
• Re-focus your portfolio with emphasis on “human need”. You should consider stocks and ETFs of companies and industries that provide goods and services that are actually NEEDED. Think about what people will continue to buy no matter how good or bad the economy is. I think that part of your long-term picture should include commodities.
Trillion-dollar tinkering will continue in Washington. Ongoing massive blunders and financial difficulties will need to be faced by all of us. Take steps now. You will be glad you did.
If you want to be alerted to the next financial educational programs and essays, feel free to follow me at www.twitter.com/paulmlad.
We have to be mindful of the fact that much of today’s difficulties (and tomorrow’s) is not due to some “Democrat” or “Republican” or strictly to something that is “left-wing” or “right-wing”. It is primarily due to Statism. “Statism” is the idea and practice that government should kept growing and becoming more and more involved in our private lives, businesses and finances. Unfortunately, most politicians across the political landscapes tend to be statists (at varying degrees). For the public, this is a fatal attraction since the unintended consequence is that it breeds greater dependence for more and more of our citizenry.
The problem with dependence means setting yourself up for vulnerability. Don’t let it happen! Today, there are millions of adults in our country that are dependent on others (such as government). What happens when government fails? Would you want to depend on a government bureaucracy such as the state of California or on a corporation such as General Motors (which is also dependent on government)? What other government agencies and corporations are at risk? What will happen when the federal government itself starts having financial problems? How about Social Security?
The more you strive for independence and self-sufficiency, the safer you will be.
----------------------------
Paul Mladjenovic, CFP is the author of Stock Investing for Dummies and the audio “HOW TO CASH IN ON THE COMMODITIES SUPER BOOM”.
Tuesday, December 15, 2009
Is Buy and Hold Dead?
Copyright 2009. By Paul Mladjenovic
www.ProsperityNetwork.net
In today’s turbulent, volatile, roller-coaster market, is the age-old adage about “Buy and Hold” bad advice? In recent months I have heard or read comments such as…
“The “Buy and hold strategy” is an archaic idea and would be financial suicide in today’s market.”
“People are better off with short-term strategies so that they can try to buy before the market goes up and sell before the market goes down. Then…when the market goes down, that is a buying opportunity. Use the volatility in your strategies”
“The “Buy and Hold Strategy” was fine a long time ago when markets were different. It is not a good strategy for today’s roller-coaster markets”
I am sure that you have read or heard similar remarks. Certainly, as you have read my essays you would know that I have written much about the “sea change” in recent years for our economy and the financial markets. There are many strategies that were fine years ago but would indeed be dangerous today.
But does a “sea change” mean that fairly reliable strategies are in danger of becoming obsolete? It certainly depends on the strategy and it definitely depends on who you are, what your financial profile is, what you are trying to accomplish and what type of assets you are investing in. Let’s take a look at “Buy and hold”.
I am sure that if you “buy and hold” bad investments then you will eventually be in trouble. However, if you “buy and hold” good investments, it would be a different story. We all know that the decade of 2000-2009 had lots of wild rides and the market had many nail-biting moments, but how did the “buy and hold” strategy do?
How did “buy and hold” as a strategy fair for different assets since the beginning of the decade?
-------------------------------------------------------------
Asset class January 2000 Recent price Gain/Loss
(high price) (Nov. 30, 2009) After 9 ½ years…)
The “Dow” (DJIA) 11,722 10,345 DOWN 12%
Nasdaq Composite 4,235 2,145 DOWN 49%
S&P 500 1,465 1,096 DOWN 25%
The value of the dollar 99.87 85.64 DOWN 14%
(based on dollar index)
Oil 21 71 UP 238%
Gold 288 1180 UP 310%
Silver 5 18 UP 260%
----------------------------------------------------
As you can see from the above table, “Buy and Hold” was dumb for some things and very smart for others. There was nothing wrong with the strategy…it depended on the particular investment vehicle.
Very recently, I was asked how I did during the recent market mayhem. I answered quite honestly that a batch of my favorite stocks and ETFs were hit very hard during late 2008-early 2009. Some of the positions were down a bone-jarring 50-70%. Did it bother me? Sure…why wouldn’t it? But these were quality securities that were intended as long-term core holdings and not capricious vehicles to jump in and out of. “Buy and Hold” means that you “measure twice, cut once”. Those stocks and ETFs were bought early in the decade and they are almost all up by triple-digit percentages…Yes!…in spite of the chaos of 2008-2009.
“Buy and Hold” as a strategy is fine. It has served me and many other patient investors well. It is still an important feature of patient, successful, long-term investing. The point is to understand that particular investment and what are the economy, financial & political mega-trends that unfold over a long period of time. Good investments will zig-zag upward over the long term while bad investments will zig-zag downward during the same time frame.
If you would like a good course on how to invest, you can check out my national seminar entitled “The $50 Wealth-Builder” at www.ProsperityNetwork.net (see Bronze package). I cover stocks, mutual funds, ETFs, precious metals and real estate.
What mega-trends do I see coming? For the coming years, I expect the commodities bull market to continue and I tell my students that investments tied to “human need” will excel. To learn how to invest in today’s economy, the audio financial seminar mentioned above will provide you with the guidance you will need. In spite of the recent stock market rally, I believe that my twin-forecast will come to pass in the next few years; We will see both rising inflation and a depressed economy unless they radically change course in Washington (Don’t hold your breath!).
-----------------------------------
Paul Mladjenovic, CFP is the instructor of the national financial seminar “The $50 Wealth-Builder” and the author of “Stock Investing for Dummies” and “Precious Metals Investing for Dummies. His website is www.ProsperityNetwork.net.
www.ProsperityNetwork.net
In today’s turbulent, volatile, roller-coaster market, is the age-old adage about “Buy and Hold” bad advice? In recent months I have heard or read comments such as…
“The “Buy and hold strategy” is an archaic idea and would be financial suicide in today’s market.”
“People are better off with short-term strategies so that they can try to buy before the market goes up and sell before the market goes down. Then…when the market goes down, that is a buying opportunity. Use the volatility in your strategies”
“The “Buy and Hold Strategy” was fine a long time ago when markets were different. It is not a good strategy for today’s roller-coaster markets”
I am sure that you have read or heard similar remarks. Certainly, as you have read my essays you would know that I have written much about the “sea change” in recent years for our economy and the financial markets. There are many strategies that were fine years ago but would indeed be dangerous today.
But does a “sea change” mean that fairly reliable strategies are in danger of becoming obsolete? It certainly depends on the strategy and it definitely depends on who you are, what your financial profile is, what you are trying to accomplish and what type of assets you are investing in. Let’s take a look at “Buy and hold”.
I am sure that if you “buy and hold” bad investments then you will eventually be in trouble. However, if you “buy and hold” good investments, it would be a different story. We all know that the decade of 2000-2009 had lots of wild rides and the market had many nail-biting moments, but how did the “buy and hold” strategy do?
How did “buy and hold” as a strategy fair for different assets since the beginning of the decade?
-------------------------------------------------------------
Asset class January 2000 Recent price Gain/Loss
(high price) (Nov. 30, 2009) After 9 ½ years…)
The “Dow” (DJIA) 11,722 10,345 DOWN 12%
Nasdaq Composite 4,235 2,145 DOWN 49%
S&P 500 1,465 1,096 DOWN 25%
The value of the dollar 99.87 85.64 DOWN 14%
(based on dollar index)
Oil 21 71 UP 238%
Gold 288 1180 UP 310%
Silver 5 18 UP 260%
----------------------------------------------------
As you can see from the above table, “Buy and Hold” was dumb for some things and very smart for others. There was nothing wrong with the strategy…it depended on the particular investment vehicle.
Very recently, I was asked how I did during the recent market mayhem. I answered quite honestly that a batch of my favorite stocks and ETFs were hit very hard during late 2008-early 2009. Some of the positions were down a bone-jarring 50-70%. Did it bother me? Sure…why wouldn’t it? But these were quality securities that were intended as long-term core holdings and not capricious vehicles to jump in and out of. “Buy and Hold” means that you “measure twice, cut once”. Those stocks and ETFs were bought early in the decade and they are almost all up by triple-digit percentages…Yes!…in spite of the chaos of 2008-2009.
“Buy and Hold” as a strategy is fine. It has served me and many other patient investors well. It is still an important feature of patient, successful, long-term investing. The point is to understand that particular investment and what are the economy, financial & political mega-trends that unfold over a long period of time. Good investments will zig-zag upward over the long term while bad investments will zig-zag downward during the same time frame.
If you would like a good course on how to invest, you can check out my national seminar entitled “The $50 Wealth-Builder” at www.ProsperityNetwork.net (see Bronze package). I cover stocks, mutual funds, ETFs, precious metals and real estate.
What mega-trends do I see coming? For the coming years, I expect the commodities bull market to continue and I tell my students that investments tied to “human need” will excel. To learn how to invest in today’s economy, the audio financial seminar mentioned above will provide you with the guidance you will need. In spite of the recent stock market rally, I believe that my twin-forecast will come to pass in the next few years; We will see both rising inflation and a depressed economy unless they radically change course in Washington (Don’t hold your breath!).
-----------------------------------
Paul Mladjenovic, CFP is the instructor of the national financial seminar “The $50 Wealth-Builder” and the author of “Stock Investing for Dummies” and “Precious Metals Investing for Dummies. His website is www.ProsperityNetwork.net.
Thursday, December 10, 2009
How Government hurts Job Creation
From a prior post, I discussed how jobs are created. To summarize, here is a quick list...
1. Someone starts a business (the entrepreneur)
2. He/She struggles to get it established and grow it.
3. If the enterprise succeeds and does indeed grow, he/she hires someone
to help with running and managing the enterprise.
4. As the enterprise grows, more help is needed to run it so the business owner hires more people.
In a nutshell, that is how it works. So it is important to remember that business start-up is the "seed" while products, services and...yes!...JOBS are the "fruit".
Therefore, our society (especially the government) needs to encourage business development and make it as easy as possible for business to flourish. In addition, we need to make it easy for businesses to hire. However, this is not reality.
government makes it very difficult for a business to flourish and to hire more employees. Think for a moment, what it takes a business to hire even a single person.
Make believe that you are a businessperson. Here is what you should expect:
1. You must be aware of federal labor laws that are voluminous and constantly changing. This includes (but is not limited to) federal immigration statutes,diversity mandates, special rules for hiring women, minorities, etc.
2. You must be aware of state labor laws that are voluminous and constantly changing. This includes (but is not limited to) state federal immigration statutes,diversity mandates, special rules for hiring women, minorities, etc.
3. Federal minimum wage laws must be complied with even if you think that the market value of the labor provided is not worth it.
4. Most states also have separate minimum wage laws that must be complied with.
5. You must file monthly/quarterly/annual payroll reports for federal & state agencies. Penalties for filing late or erroneously may apply.
6. The government mandates that you meet (where necessary) rules, reporting and fees related to workmen's compensation issues and insurance.
7. There are federal mandated payroll taxes that must be paid by the employer.
Example: The employer must pay his/her share of the FICA and Medicare payroll taxes which amounts to 7.65% on top of and in addition to any wages paid. Don't forget the state!
8. For some job categories, government mandates that your business must provide and or pay for certain conditions and special services depending on the employee and job function.
9. You must seek or have (pay for) legal services just in case your employee decides to sue you for anything that falls short of expectations and other potential issues related to health, disability, bias, workload, lack of recognition, unfair compensation, etc.
10. If your employee decides to take "family leave" you will have to pay them directly for non-work during a period that could exceed 12 weeks or indirectly to a temporary worker to cover job duties in the absence of the worker.
11. If you decide to fire that employee, the burden falls on you to prove your case. Depending on the reason and or the state or industry this includes (but is not limited to) properly filing the paperwork, providing substantiation for your case, expensive legal assistance to help you process the termination.
I remind you...THIS IS A PARTIAL LIST.
We can't ask small business to hire more folks and then make it much more difficult to justify doing so.
All of us need to understand that "wages" paid to a worker is not the same as the "cost" (and risk) of hiring and keeping that worker.
When you add up all the costs (direct and indirect) of hiring someone, it can easily be 40% higher than the wages or salary that the worker sees.
WHEN YOU INCREASE THE COSTS AND RISKS OF HAVING AN EMPLOYEE, THEN THE DEMAND FOR AN EMPLOYEE GOES DOWN. WHEN DEMAND GOES DOWN, YOU HAVE MORE UNEMPLOYMENT.
Please share these thoughts with others...especially if you want to see more jobs in America...not less.
Paul Mladjenovic
P.S. This is a major reason why I think that everyone should start their own home-based business as a solo entrepreneur. Part-time or full-time, it should be part of your money-earning strategies. Learn more starting a home business (click here).
1. Someone starts a business (the entrepreneur)
2. He/She struggles to get it established and grow it.
3. If the enterprise succeeds and does indeed grow, he/she hires someone
to help with running and managing the enterprise.
4. As the enterprise grows, more help is needed to run it so the business owner hires more people.
In a nutshell, that is how it works. So it is important to remember that business start-up is the "seed" while products, services and...yes!...JOBS are the "fruit".
Therefore, our society (especially the government) needs to encourage business development and make it as easy as possible for business to flourish. In addition, we need to make it easy for businesses to hire. However, this is not reality.
government makes it very difficult for a business to flourish and to hire more employees. Think for a moment, what it takes a business to hire even a single person.
Make believe that you are a businessperson. Here is what you should expect:
1. You must be aware of federal labor laws that are voluminous and constantly changing. This includes (but is not limited to) federal immigration statutes,diversity mandates, special rules for hiring women, minorities, etc.
2. You must be aware of state labor laws that are voluminous and constantly changing. This includes (but is not limited to) state federal immigration statutes,diversity mandates, special rules for hiring women, minorities, etc.
3. Federal minimum wage laws must be complied with even if you think that the market value of the labor provided is not worth it.
4. Most states also have separate minimum wage laws that must be complied with.
5. You must file monthly/quarterly/annual payroll reports for federal & state agencies. Penalties for filing late or erroneously may apply.
6. The government mandates that you meet (where necessary) rules, reporting and fees related to workmen's compensation issues and insurance.
7. There are federal mandated payroll taxes that must be paid by the employer.
Example: The employer must pay his/her share of the FICA and Medicare payroll taxes which amounts to 7.65% on top of and in addition to any wages paid. Don't forget the state!
8. For some job categories, government mandates that your business must provide and or pay for certain conditions and special services depending on the employee and job function.
9. You must seek or have (pay for) legal services just in case your employee decides to sue you for anything that falls short of expectations and other potential issues related to health, disability, bias, workload, lack of recognition, unfair compensation, etc.
10. If your employee decides to take "family leave" you will have to pay them directly for non-work during a period that could exceed 12 weeks or indirectly to a temporary worker to cover job duties in the absence of the worker.
11. If you decide to fire that employee, the burden falls on you to prove your case. Depending on the reason and or the state or industry this includes (but is not limited to) properly filing the paperwork, providing substantiation for your case, expensive legal assistance to help you process the termination.
I remind you...THIS IS A PARTIAL LIST.
We can't ask small business to hire more folks and then make it much more difficult to justify doing so.
All of us need to understand that "wages" paid to a worker is not the same as the "cost" (and risk) of hiring and keeping that worker.
When you add up all the costs (direct and indirect) of hiring someone, it can easily be 40% higher than the wages or salary that the worker sees.
WHEN YOU INCREASE THE COSTS AND RISKS OF HAVING AN EMPLOYEE, THEN THE DEMAND FOR AN EMPLOYEE GOES DOWN. WHEN DEMAND GOES DOWN, YOU HAVE MORE UNEMPLOYMENT.
Please share these thoughts with others...especially if you want to see more jobs in America...not less.
Paul Mladjenovic
P.S. This is a major reason why I think that everyone should start their own home-based business as a solo entrepreneur. Part-time or full-time, it should be part of your money-earning strategies. Learn more starting a home business (click here).
Wednesday, December 2, 2009
How to Create a Real Job...
Recent times have shown us the worst job market since the Great Depression. Right now, politicians, economists and other public commentators are discussing and debating the question...
"How do we create jobs?"
The odd thing is that the leading decision makers in Washington have NEVER personally created a job. That's right...the top economic decision makers in the Obama administration and the congressional leadership have NEVER run a business or have ever met a payroll. That is incredible to me. We have people trying to make policy that allegedly would lead to "job creation" that are basically clueless about how a real job is actually created. That has got to make your jaw drop.
That would be like getting a bunch of bureaucrats together to figure out the rules for brain surgery (well...that's not really so far-fetched since that is happening right now in the healthcare debate but that's a different topic). Anyway...
I think that it is important for us to realize how a job is actually made. And I mean a "private job". You have heard a lot about "government jobs" and how the government is expanding lately and "adding jobs" as they expand government agencies.
Please don't confuse "government jobs" with "real jobs" as there is a crucial difference. Also if a reader of this post works for the government please do not take offense as you need to know the difference as well.
Important point:
THE GOVERNMENT CAN NOT CREATE A SINGLE JOB AND HAS NEVER CREATED A SINGLE JOB. WHY? BECAUSE THE ONLY WAY GOVERNMENT CAN "CREATE A JOB" IN A GOVERNMENT AGENCY IS BY FIRST DESTROYING A JOB IN THE PRIVATE SECTOR.
If a government agency "hires" a person and then pays that person..say...$50,000, it must first take by force $50,000 from the private economy. Doing so then removes the money necessary to create a job in the private economy. The more the government grows, the more resources it takes...by FORCE...from the private economy wheich subsequently deprives the private economy from using those resources more productively as a private job.
Remember that a private job is involved in the production of goods and services. From this, taxes are paid to fund the government's activities. In this sense we can see that government jobs are basically funded by private jobs.
Some may point out that some government jobs are not funded by taxes but instead are funded by government borrowing. This does not change the dynamic; it may only change the timing. Jobs created by government debt today must be ultimately paid for by destroying future private jobs.
A healthy economy needs private job creation if it is to grow and ultimately pay for current and future goods and services and for government activity (which of course includes government jobs).
The bottom line is that private job growth is vital for both the private and the public sector. This leads us to the main question..."How do we create a real job?"
Keep in mind that real jobs are created as a by-product of business formation, growth and expansion. This is why entrepreneurs and business start-ups are an EXTREMELY important part of the job creation process. Entrepreneurs are the "seeds" while jobs are the "fruits".
If we really want to get our economy back on a healthy growth track, we MUST encourage business start-up, business formation and business expansion. We must embrace and enact policies that ignite and encourage entrepreneurial activities.
That includes low taxes, sensible regulations and making it as easy as possible for anyone and everyone to turn their talents, skills and efforts into a new business.
I have taught thousands of people on how to start a home business in a seminar that I have done for over two decades and I am also a full-time entrepreneur as well so I practice what I preach. I even tell those that already have a job to do a business part-time from home. All of us have hobbies, talents, skills, experience and expertise...why not convert this is into a business in your spare time?
Right now, starting a home business should be considered an economic necessity. After all, the first "job" that gets created is that of the entrepreneur.
For more information about my home business seminar, go to www.SuperMoneyLinks.com or click here. For 2010, don't just wait for prosperity...make it happen.
"How do we create jobs?"
The odd thing is that the leading decision makers in Washington have NEVER personally created a job. That's right...the top economic decision makers in the Obama administration and the congressional leadership have NEVER run a business or have ever met a payroll. That is incredible to me. We have people trying to make policy that allegedly would lead to "job creation" that are basically clueless about how a real job is actually created. That has got to make your jaw drop.
That would be like getting a bunch of bureaucrats together to figure out the rules for brain surgery (well...that's not really so far-fetched since that is happening right now in the healthcare debate but that's a different topic). Anyway...
I think that it is important for us to realize how a job is actually made. And I mean a "private job". You have heard a lot about "government jobs" and how the government is expanding lately and "adding jobs" as they expand government agencies.
Please don't confuse "government jobs" with "real jobs" as there is a crucial difference. Also if a reader of this post works for the government please do not take offense as you need to know the difference as well.
Important point:
THE GOVERNMENT CAN NOT CREATE A SINGLE JOB AND HAS NEVER CREATED A SINGLE JOB. WHY? BECAUSE THE ONLY WAY GOVERNMENT CAN "CREATE A JOB" IN A GOVERNMENT AGENCY IS BY FIRST DESTROYING A JOB IN THE PRIVATE SECTOR.
If a government agency "hires" a person and then pays that person..say...$50,000, it must first take by force $50,000 from the private economy. Doing so then removes the money necessary to create a job in the private economy. The more the government grows, the more resources it takes...by FORCE...from the private economy wheich subsequently deprives the private economy from using those resources more productively as a private job.
Remember that a private job is involved in the production of goods and services. From this, taxes are paid to fund the government's activities. In this sense we can see that government jobs are basically funded by private jobs.
Some may point out that some government jobs are not funded by taxes but instead are funded by government borrowing. This does not change the dynamic; it may only change the timing. Jobs created by government debt today must be ultimately paid for by destroying future private jobs.
A healthy economy needs private job creation if it is to grow and ultimately pay for current and future goods and services and for government activity (which of course includes government jobs).
The bottom line is that private job growth is vital for both the private and the public sector. This leads us to the main question..."How do we create a real job?"
Keep in mind that real jobs are created as a by-product of business formation, growth and expansion. This is why entrepreneurs and business start-ups are an EXTREMELY important part of the job creation process. Entrepreneurs are the "seeds" while jobs are the "fruits".
If we really want to get our economy back on a healthy growth track, we MUST encourage business start-up, business formation and business expansion. We must embrace and enact policies that ignite and encourage entrepreneurial activities.
That includes low taxes, sensible regulations and making it as easy as possible for anyone and everyone to turn their talents, skills and efforts into a new business.
I have taught thousands of people on how to start a home business in a seminar that I have done for over two decades and I am also a full-time entrepreneur as well so I practice what I preach. I even tell those that already have a job to do a business part-time from home. All of us have hobbies, talents, skills, experience and expertise...why not convert this is into a business in your spare time?
Right now, starting a home business should be considered an economic necessity. After all, the first "job" that gets created is that of the entrepreneur.
For more information about my home business seminar, go to www.SuperMoneyLinks.com or click here. For 2010, don't just wait for prosperity...make it happen.
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